ECONOMIC OPTIMISM, DARK POLITICS
The Oracle Partnership – The Agenda Setting Foresight
Philippe Legrain – April 2018
Since the crisis, advanced economies have been stuck in a so-called “new normal” of sluggish growth. But the global economy is now finally firing on all cylinders again (with the notable exception of Brexiting Britain). So is this a potentially short-lived cyclical spurt, as economic pessimists fear – or might the United States and the eurozone finally be shifting on to a sustainably higher growth path? In my view there are good grounds for economic optimism, but that positive outlook is clouded by huge political risks.
Economic pessimists who believe that the good times are unlikely to last split into two camps. Supply-side pessimists fret about the imminent return of inflation. Last year’s combination of strong growth, low inflation and booming equity markets was too good to last, they reason. Starting with the United States, advanced economies are hitting capacity constraints. Unemployment is very low. Wages are picking up. Interest rates are on the rise. Slower growth and lower corporate profits beckon. But this reasoning seems, at best, premature. While it is, of course, a lagging indicator, core inflation remains subdued in the US and extremely low in the eurozone.
Demand-side pessimists believe that demand is weak for structural reasons, trapping the economy in “secular stagnation”. While spurts of strong growth are still possible in such an environment – and thanks to cheap credit, spurts may even become booms – demand eventually fades or crashes, bringing the economy back down to its feeble long-term growth path.
There is some truth to this. Wages have fallen as a share of economic output in many countries and their distribution become more unequal, both of which reduce consumption and thus business investment.
The full article is available in PDF format, please email Sandra
Here is an panel interview Philippe did with Aljazeera TV on whether Donald Trump’s Tariffs Decision will Trigger Global Trade War (he commences at 5.30)
Philippe is a very succinct speaker who delivers cutting edge content in very captivating and easy to assimilate manner.
PHILIPPE LEGRAIN
Expertise: Brexit, Europe, Immigration, Geopolitics and Global Macro Overview
“Philippe Legrain provides an original and insightful analysis of what has gone wrong with Europe’s economies and politics and a timely warning that the crisis ultimately threatens our open societies. Better still, he provides a blueprint for a brighter future and how to achieve it” – George Soros
Philippe Legrain is a British economist and writer. He specializes in global and European economic issues, notably globalisation, migration, the post-crisis world and the euro.
A visiting senior fellow at the London School of Economics’ European Institute, he is a former adviser to European Commission president José Manuel Barroso and and special adviser to World Trade Organisation Director-General Mike Moore.
He is founder of Open Political Economy Network (OPEN), an international think-tank, with a ground-breaking new study on how refugees can contribute to the economy and a columnist for Project Syndicate.
His four books include Immigrants: Your Country Needs Them, shortlisted for the 2007 Financial Times Business Book of the Year, and European Spring: Why Our Economies and Politics are in a Mess – and How to Put Them Right, among the FT’s Best Books of 2014.
His reports for OPEN and the Tent Foundation include Refugees Work: A humanitarian investment that yields economic dividends and Step Up: How to get refugees into work quickly.
Through his work, writing and media appearances, Philippe has been at the heart of many big debates of the past 20 years – Globalisation, International Migration, The Financial Crisis, The Euro and Brexit.
Philippe’s 2017 opening keynote for the Spinoza Foundation was described as a ‘magnificent tour de force’ by Martin Wolf.
European Spring: Why Our Economies and Politics are in a Mess and How to Put Them Right (2014), was described as “essential reading” by the Financial Times and was among its Best Books of 2014
Presentation Themes Include:
A Global Macroeconomic Overview – The Risks – What should Asset Managers be aware of ?
Risks – Geo-politically and Economically for 2018.
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